What is the one-time right that a Cicis franchisee has regarding closing the Restaurant under the Reopen Incentive Program Addendum?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
- Right to Close Restaurant. You and we agree that you will have a one-time right to permanently close the Restaurant if, for the period beginning on the date the Restaurant reopens for regular business and ending on the day that is 1.5 years after that date (the "Assessment Period"), the Restaurant's EBITDA (earnings before interest, taxes, depreciation and amortization), considering only those expenses that are normal restaurant-level operating expenses, is a negative number. To exercise the right to close, you must provide us, no sooner than the end of the Assessment Period and no later than 30 days after the end of the Assessment Period, (a) a profit and loss statement for the Assessment Period, which may be internally prepared in accordance with generally accepted accounting principles, showing the negative EBITDA, and (b) written notice of your intention to close and the date on which you intend to do so. On or prior to the closure, you and we will execute a written mutual termination of the Franchise Agreement, which will include a general release of any and all claims you and your related parties might have against us and our related parties, standard confidentiality and non-disparagement provisions, and your
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, under the Reopen Incentive Program Addendum, a franchisee has a one-time right to permanently close the restaurant if its EBITDA (earnings before interest, taxes, depreciation, and amortization), considering only normal restaurant-level operating expenses, is negative during the period beginning when the restaurant reopens and ending 1.5 years later, referred to as the Assessment Period.
To exercise this right, the Cicis franchisee must provide the franchisor with a profit and loss statement for the Assessment Period, which may be internally prepared according to generally accepted accounting principles, showing the negative EBITDA. This statement must be submitted no sooner than the end of the Assessment Period and no later than 30 days after its end. The franchisee must also provide written notice of their intention to close the restaurant, including the intended closure date.
Prior to or on the closure date, the Cicis franchisee and franchisor will execute a written mutual termination of the Franchise Agreement. This termination will include a general release of any claims the franchisee and related parties might have against the franchisor and its related parties. It will also contain standard confidentiality and non-disparagement provisions, and the franchisee and their owners must agree to comply with the obligations under the Franchise Agreement that are triggered by or survive the termination of the agreement. This provides a safety net for franchisees who reopen a previously closed Cicis location but are unable to achieve profitability within the specified timeframe.